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Ecoboard Industries Ltd.

BSE: 523732 Sector: Others
NSE: WESTERNBIO ISIN Code: INE866A01016
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NSE 05:30 | 01 Jan Ecoboard Industries Ltd
OPEN 4.55
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VOLUME 952
52-Week high 5.42
52-Week low 1.75
P/E
Mkt Cap.(Rs cr) 8
Buy Price 4.64
Buy Qty 450.00
Sell Price 4.55
Sell Qty 1901.00
OPEN 4.55
CLOSE 4.55
VOLUME 952
52-Week high 5.42
52-Week low 1.75
P/E
Mkt Cap.(Rs cr) 8
Buy Price 4.64
Buy Qty 450.00
Sell Price 4.55
Sell Qty 1901.00

Ecoboard Industries Ltd. (WESTERNBIO) - Auditors Report

Company auditors report

To the Members of Ecoboard Industries Limited

Report on the Financial Statements

Opinion

We have audited the accompanying financial statements of Ecoboard Industries Limited("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss including the statement of Other comprehensiveincome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended (‘Ind AS') and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 and its loss total comprehensive income its cash flowsand the statement of changes in Equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditors'Responsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

A. Going Concern

Description of Key Audit Matter

The availability of sufficient funding and the testing of whether the company will beable to continue meeting its obligations under the financing covenants are important forthe going concern assumption and as such are significant aspects of our audit. This testor assessment is largely based on the expectations of and the estimates made bymanagement. The expectations and estimates can be influenced by subjective elements suchas estimated future cash flows forecasted results and margins from operations. Estimatesare based on assumptions including expectations regarding future developments in theeconomy and the market.

Description of Auditor's Response

We have used our own expertise in evaluating the assumptions and forecasts made by themanagement. We have specifically devoted attention to the assumptions made with respect tothe future cash flow in order to assess the Company's ability to continue meeting itspayment obligations and its obligations under the financing covenants in the year ahead.

 

We draw attention to Note 27 to the financial statements relating to the uncertaintyabout the Going Concern assumption. The Company has accumulated losses in excess of itspaid up capital and reserves. Its net worth has been fully eroded. The Company isincurring continuous losses for past few years. Capacity utilisation in its particle boardbusiness is insignificant. Company is struggling to mobilise funds for its workingcapital. These conditions may indicate the existence of a material uncertainty that maycast significant doubt about the Company's ability to continue as a going concern.However the financial statements of the Company have been prepared on a going concernbasis for the reasons stated below:

(i) Company has entered into Agreement for sale of its land and buildings atJambhulwadi. Money raised from this sale will be available for reduction of bankers duesand augmenting working capital funds and net worth of the Company.

(ii) Company has repaid during the year dues of one bank as per settlement arrived atwith the bank and also given One Time Settlement proposal to another bank which is underconsideration of the said bank.

(iii) Company's Bio-Systems division has performed well during the current year and ishaving orders in hand for the next year.

Information Other than the Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and Analysisand Board's Report including Annexures to Board's Report (the "reports") butdoes not include the financial statements and our auditors' report thereon. The reportsare expected to be made available to us after the date of this auditors' report.

Our opinion on the financial statements does not cover the other information and we donot and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.

When we read the reports if we conclude that there is a material misstatement thereinwe are required to communicate the matter to those charged with governance as requiredunder SA 720 ‘The Auditor's responsibilities Relating to Other Information'.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Company's Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditors' Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

 

Material uncertainty related to Going Concern

We draw attention to Note 27 to the financial statements relating to the uncertaintyabout the Going Concern assumption. The Company has accumulated losses in excess of itspaid up capital and reserves. Its net worth has been fully eroded. The Company isincurring continuous losses for past few years. Capacity utilisation in its particle boardbusiness is insignificant. Company is struggling to mobilise funds for its workingcapital. These conditions may indicate the existence of a material uncertainty that maycast significant doubt about the Company's ability to continue as a going concern.However the financial statements of the Company have been prepared on a going concernbasis for the reasons stated below:

(i) Company has entered into Agreement for sale of its land and buildings atJambhulwadi. Money raised from this sale will be available for reduction of bankers duesand augmenting working capital funds and net worth of the Company.

(ii) Company has repaid during the year dues of one bank as per settlement arrived atwith the bank and also given One Time Settlement proposal to another bank which is underconsideration of the said bank.

(iii) Company's Bio-Systems division has performed well during the current year and ishaving orders in hand for the next year.

Our opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Companies Act 2013 we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the said Order to the extent applicable.

2. As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

e) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B; and Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting. g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit & Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 31(A)(b) to the financialstatements;

(ii) The Company did not have any long-term contracts including derivative contractsthat may result in material foreseeable loss.

(iii) Currently there are no amounts held by the Company that are required to betransferred to the Investor Education and Protection Fund hence we do not comment on thesame.

For B. M. CHATURVEDI & CO Chartered Accountants ICAI FRN: 114317W

Animesh Kumar Dutta Place : Pune Partner Date: 29th May 2019 ICAI M.N.132389

Annexure A to the Independent Auditors' Report

 

The Annexure referred to in Paragraph 1 under the heading of ‘Report on OtherLegal and Regulatory Requirements' of our report of even date on the financial statementsof Ecoboard Industries Limited for the year ended 31st March 2019.

1. (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of two years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company except one office property situated at Ahmedabadwhich is yet to be registered in the name of the Company title deeds of other immovableproperties are held in the name of the Company.

2. According to the information given to us physical verification of inventorywas conducted by the management during the year at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed onphysical verification of inventories.

3. The Company has not granted any loans secured and unsecured to companiesfirms or other parties listed in the register maintained under Section 189 of theCompanies Act 2013. Accordingly paragraphs 3(iii)(a)(b) and (c) of the Order are notapplicable.

4. The Company has not given loans investments guarantees and security.Accordingly Paragraph 3(iv) of the Order is not applicable.

5. In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits from the public. The provisions of Sections 73to 76 of the Companies Act 2013 and the rules framed thereunder are not applicable.

6. We are informed that the Central Government has not prescribed maintenance ofcost records under Section 148(1) of the Companies Act 2013 for the Company's products.

7. (a) According to the information and explanations given to us and on thebasis of our examination of records of the Company the Company is not regular indepositing undisputed statutory dues including Provident Fund Income-tax Value AddedTax Service-tax Goods and Service tax and other material statutory dues applicable to itand in many cases payments were made after due dates. According to the information andexplanations given to us Tax deducted at Source of Rs. 56.38 lakh Service tax of Rs.26.53 lakh Excise duty of Rs 1.87 lakh Value Added Tax and Central Sales Tax of Rs.240.52 lakh Goods and Service tax of Rs. 0.20 Provident Fund of Rs. 21.52 lakh ESIC

Rs 0.02 lakh and Profession tax Rs 1.16 lakh were in arrears as at 31/03/2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us following amounts ofduty and taxes were under dispute hence not paid:

Nature of dues Period Amount Rs. in lakhs

Forum where the dispute is pending

Central Excise duty 2003-04 28.45 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2004-05 2.98 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2004-05 1.52 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2006-09 2.29 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2006-09 402.14 Commissioner of Central
Excise (Appeals)
Central Excise duty 2009-10 13.19 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2008-10 343.98 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2010-13 207.60 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2012-14 77.00 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2012-14 28.97 Commissioner of Central
Excise (Appeals)
Central Excise duty 2015-16 41.59 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2004-05 28.35 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2004-05 2.37 Commissioner of Central
Excise (Appeals)
Central Excise duty 2004-05 2.26 Custom Excise & Service
Tax Appellate Tribunal
Central Excise duty 2016-18 28.93 Custom Excise & Service
Tax Appellate Tribunal
Central Sales tax 2006-07 63.27 Commissioner of Sales tax
(Appeals)
Central Sales tax 2011-12 61.79 Commissioner of Sales tax
(Appeals)
Maharashtra Value 2011-12 23.76 Commissioner of Sales tax
Added Tax (Appeals)
Central Sales tax 2012-13 24.24 Commissioner of Sales tax
(Appeals)
Maharashtra Value 2012-13 264.68 Commissioner of Sales tax
Added Tax (Appeals)
1649.36

8. According to the information and explanations given to us by the managementthe Company has received Notice u/s 13 (2) of the Securitisation & Reconstruction ofFinancial Assets and Enforcement of Security Interest Act 2002 from one of its bankersnamely Bank of Maharashtra recalling the loans of Rs. 1243.32 lakh plus interest.Outstanding balance as on 31/03/2019 is Rs 1112.93 lakh (excluding interest). Company hassubmitted One Time Settlement proposal with the bank and the same is under considerationof the banks.

9. According to the information and explanation provided to us Company has notraised money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3(ix) of the Order isnot applicable.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

11. According to the information and explanations given to us and based on ourexamination of records of the Company the Company has paid/ provided managerialremuneration during the year in accordance with the provisions of section 197 read withSchedule V to the Companies Act 2013.

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of records of the Company transactions with related parties are in compliancewith Sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.

14. According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the year.

15. According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly Paragraph 3(xv) ofthe Order is not applicable.

16. The Company is not required to register under Section 45-IA of the Reserve Bank ofIndia Act 1934.

For B. M. CHATURVEDI & CO
Chartered Accountants
ICAI FRN: 114317W
Animesh Kumar Dutta
Place : Pune Partner
Date: 29th May 2019 ICAI M.N. 132389

Annexure B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial Controls over financial reporting of EcoboardIndustries Limited (‘the Company') as of 31st March 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

 

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for the establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

 

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

 

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

 

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

 

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India".

For B. M. CHATURVEDI & CO Chartered Accountants ICAI FRN: 114317W

Animesh Kumar Dutta Place : Pune Partner Date: 29th May 2019 ICAI M.N.132389

ECOBOARD INDUSTRIES LIMITED